I Was Injured On The Job An Can No Longer Work .When This Happened I Worked Out My Income Over The Next 5 Years The First 2 Years My Income Droped 35% The Next Year Another 15% The 4th Year Another 15% This Is Where My Income Is At This Time.

The First 2 Years I made All Of My House Payments But Could Not Afford To Pay Credit Card Payments And All Of Them Have Gone Into Collection.

After The First 2 Years I Called Bank Of America And Informed Them About My Loss Of Income And What It Would Be In The Future Thay Told Me To Apply For A Home Affordable Modification.

When I did I agian Told Them About My Future Income Loss Thay Worked Out The Modification And Told Me I Could Reapply For A new Modification In 1 Year When My Income Was About To Change.

I made All Of My House Payments And Tryed To Get A Modification When My Income Did Change Thay Then Told Me I Could Not Get A Modification Through But To Go Through Save Our Home California I did That And Thay Told To Stop Making Payments Wile Thay Worked It Out.Bank Of America Then Pulled My Applation And Told Me Not To Make Payments Until Thay Worked Out A modification Under A new Program That Thay Had To Offer Under A Settelment Thay Then Filed Foreclosure And Brought On A Sale Date Whitch Is Where I Am Today.

Thay Did Not Send Me Any Notice As Per The Settelment.And Changed Account Managers 3 Times All Three Asking For More Paper Work To Be Faxed And Telling Me That My Applacation Was Approved And Sent To Underwriters.The Last Tine The Account Manager Told Me He Would File To Have The Sale Date Postponed.But It Has Yet To Be Postponed.I Have An Appointment.With A Bank Of America Service To Hand Deliver More Paper Work.And Was Told That After Receving This Paper Work Thay To Would File To Have my Sale Date Postponed.I have a 28,000 Past Due Note And 15,000 Credit Card Debt.

What Are My Options Chapter 7 Being The Last What Else Can I Due If Any Thing

Doug”

The Answer

Dear Doug,

As I see it you are battling two issues. The first is the loss of income which appears to still be ongoing. Because you can no longer work you may be living on some sort of benefits as a result.

The second issue is the complexity of trying to get a Bank of America mortgage modification. I agree that the Bank of America process is difficult and time consuming. You might want to contact a HUD Housing Counselor who can provide you with free assistance to review your modification situation.

My concern at this point is if you would even qualify for a modified mortgage with your income situation. If you do not meet the Bank of America underwriting guidelines for the modification it’s a dead issue out of the gate.

And then we have the bigger issue that no bank is required to modify any mortgage if they don’t want to.

On top of that we have this lingering credit card debt that seems to be just flat out unaffordable with your current income situation.

So the question you need to ask yourself, if you feel your income is now going to remain at the current level, is what do we need to do to get your future life to fit within your future income.

I would suspect that after reviewing your income and expenses you will find that being able to pay your mortgage, even modified, and begin a debt repayment plan on the past due debt, plus start to save money in an emergency fund is all going to be darn near impossible. If I’m wrong, tell me in the comments below.

But if I’m right then our focus needs to shift to considering bankruptcy as a way to wrap up all of your old debt and move forward in a new reality. In that case, if you have little to no equity in your property it might make sense to strategically default on the mortgage, let Bank of America take the house back and then discharge all of your debt and start over.

If you decide to do that then you can stop making your mortgage payments.

Obviously this will result in marks on your credit but you can easily rebuild your credit afterwards using this free guide.

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